The Penobscot Nursing Home, in Penobscot, Maine, has been in a state of state-imposed receivership for the last six years, and may be facing closure as the Centers for Medicare and Medicaid Services threaten to cut its funding.

In October 2008, the Maine Department of Health and Human Services seized control of Penobscot Nursing Home, calling it, at that time, a temporary arrangement. Close to six years later, PNH is still in receivership and problems continue for the troubled facility.

In the most recent turn of events, the Centers for Medicare and Medicaid Services (CMS) has issued notice that it will terminate its Provider Agreement, citing “failure to maintain compliance with Medicare requirements,” according to a press release from DHHS. Funding for all existing skilled care and long-term nursing residents covered by Medicare is expected to stop August 3; CMS had already cut funding for new clients beginning in May.

The funding for the assisted living side, operating under the name Northern Bay Residential Care, has not been eliminated and as of press time those living in the facility will not be affected, according to Brenda Gallant of the Maine Long Term Care Ombudsman office which is assisting residents and their families on the nursing home side (skilled care and long-term care).

Officials from Penobscot and Blue Hill have been watching the downward progression of the nursing home and have stepped in through court action to ensure the towns have some say in how Penobscot’s largest employer and elder care facility exists. The news of a possible closure has taken them by surprise, and the town fathers are again back in the middle of the issue to find out how best to proceed.

According to Blue Hill Selectman Jim Schatz and Penobscot Selectman Paul Bowen, the towns, represented by Ellsworth-based attorney Diane O’Connor, are exploring all options available to them and are pressing DHHS staff for meetings in order to understand the implications of the decisions by the state and federal agencies.

In 2011, the towns successfully petitioned the court as “interveners” in the legal issues surrounding PNH, giving them the ability to follow the receivership process and have a role if the current arrangement failed.

“This is news to us,” said Schatz, speaking about the latest developments as he pulled volumes of files from his desk. Because of the town’s status as an intervener, it receives copies of documents that pass through the court. Schatz said the towns were not made aware of the current state of the facility or the immediate jeopardy it faces in terms of possible closure, despite language in a DHHS press release that says the Penobscot and Blue Hill municipal officers were contacted as part of the process. The release also says “Maine’s legislative contingent was informed,” but State Representative Ralph Chapman, who currently represents the town of Penobscot in the Legislature, said he had not received any information on the issue prior to the latest DHHS press release.

While frustrated with recent events, Bowen said he believes this is not about the health and safety of the residents, but about DHHS taking the bed licenses, just as it attempted to do in 2012. “In 2013 a survey of the facility was conducted and no problems were documented—and now all of a sudden there are hundreds of pages of complaints,” he said, adding he believes it is “completely bogus.”

According to DHHS documents, several letters were sent to the court, beginning in May, stating “its mounting concern for the health and safety of residents at the PNH.” The department claims that beginning in January deficiencies were found at the facility and were not corrected in time for subsequent inspections in March, April or May.

In May a plan to correct the violations was submitted to the state, “but later investigation revealed that the plan was not fully implemented, or that it was ineffective,” according to a news release from DHHS issued June 18.

The CMS decision to cut Medicare and Medicaid funding is separate from the court actions, explained Schatz, noting that there were many other documents that should have been made available to the towns as the most recent problems were documented.

The recent events are also news to the owner of the facility, Sifwat Ali. Ali, the owner of ELRCare Maine, purchased the property shortly before it was taken into receivership. Ali asserts—just as he has since the facility was taken into receivership—that the bed licenses are what the state is after and is using all its resources to obtain them. He said he believed DHHS is in violation of the 2012 court order that gave others a say, including the towns of Blue Hill and Penobscot, in the process if the facility is no longer deemed viable.

“It would be an injustice to close the nursing home,” said Ali, adding that he has continued to fight an uphill battle to regain control of the facility.

Not the first time

This is not the first time PNH has seen its funding cut by CMS. In March 2008, CMS stopped payments after finding a number of deficiencies present in the daily operations of the facility—ranging from clerical errors, undocumented changes to residential care plans and financial viability issues. On August 25, 2008, funding was restored after the facility passed four more inspections and was found to be in compliance.

Since 2008 the problems have continued while the facility has been managed by the state. In April 2012, DHHS petitioned the courts to end the receivership, relocate the clients and sell the skilled nursing bed licenses to a for-profit company, First Atlantic, seeking to build a 61-bed nursing home in Bucksport. First Atlantic began a process to license its facility in 2011, under the state’s Certificate of Need (CON) process, only to find that it needed to obtain six more bed licenses. “The applicant must present a plan to CON that identifies MaineCare Resources totaling $2,090,966 and includes at least 6 bed rights prior to the commencement of this project,” reads the CON decision dated March 2012.

To date construction has not begun on a facility in Bucksport.

What about the people?

Since the beginning of the year, PNH has had frequent visits from the Maine Long Term Care Ombudsman Program. This nonprofit private agency is enabled under state and federal law and is authorized to work with health consumers in all aspects of long-term care. The organization has volunteers who work in more than 300 licensed long-term care facilities across the state. According to executive director Brenda Gallant, the agency has had a presence at PNH for the last few months, growing increasingly more frequent during the past few weeks as word of a possible closure looms in the skilled nursing portion of PNH.

Gallant said that, at this time, her staff is helping residents and their families find placement in other facilities, or is assisting in other ways as needed. “Our primary concern is for the residents” of PNH, said Gallant, adding that to the extent the organization can, it works to follow the wishes of the clients and their families.

Island Nursing Home in Deer Isle has admitted one resident from PNH, but as of press time all its beds are full. “The waiting list has gotten longer since the announcement was made at Penobscot Nursing Home,” said Island Nursing Home and Care Center Administrator Marc Plourde.

Town officials from Penobscot and Blue Hill continue to work to arrange conversations with ranking DHHS officials and vow to continue to seek alternative remedies to closure as long as it is feasible.